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27 Mar 2015
USD/JPY could reach 125.00 end of 2015 – Scotiabank
FXStreet (Edinburgh) - Strategists at Scotiabank believe further upside could be on the cards for the pair, targeting 125.00 by the end of the current year.
Key Quotes
“The achievement of the Bank of Japan’s (BoJ) inflation target of 2% y/y remains at risk given declining global energy prices and the Japanese economy’s lacklustre performance”.
“The BoJ’s policy stance is set to remain ultra-accommodative in the foreseeable future, with the monetary base continuing to increase substantially, by around 35-40% y/y, on the back of asset purchases by the central bank. We maintain our view that additional monetary stimulus remains a possibility in the coming months”.
“During February, USDJPY continued to trade within its three month range. The passing of broader market concerns has allowed for a shift back toward fundamentals, which suggest ongoing yen depreciation”.
“Sentiment, remains bearish, but has eased since December. The CFTC has reported consecutive weeks of narrowing gross short positions, while consensus has held a stable 125 year-end target in USDJPY since December”.
“We expect that with risk aversion easing USDJPY will shift back to trading on its currency negative fundamentals and accordingly hold a year-end target of 125”.
Key Quotes
“The achievement of the Bank of Japan’s (BoJ) inflation target of 2% y/y remains at risk given declining global energy prices and the Japanese economy’s lacklustre performance”.
“The BoJ’s policy stance is set to remain ultra-accommodative in the foreseeable future, with the monetary base continuing to increase substantially, by around 35-40% y/y, on the back of asset purchases by the central bank. We maintain our view that additional monetary stimulus remains a possibility in the coming months”.
“During February, USDJPY continued to trade within its three month range. The passing of broader market concerns has allowed for a shift back toward fundamentals, which suggest ongoing yen depreciation”.
“Sentiment, remains bearish, but has eased since December. The CFTC has reported consecutive weeks of narrowing gross short positions, while consensus has held a stable 125 year-end target in USDJPY since December”.
“We expect that with risk aversion easing USDJPY will shift back to trading on its currency negative fundamentals and accordingly hold a year-end target of 125”.